When trading the forex markets, the trader needs to do their homework on which brokers are the best for their trading style. There are numerous factors which the trader needs to consider prior to working with a forex broker. One of the most important are the fees which the broker charges for the trades placed by the trader. When trading the markets traders are subjected to forex spreads which are in essence the fees charged by the brokers.
There are two forex spreads fee structures which brokers offer. The first fee structure is fixed forex spreads and the second is variable spreads. When we discuss fixed forex spreads it’s exactly what one thinks of when determining pricing. When a trader utilizes a broker and the fees are fixed what this means is that the fee structure or spreads for their trades does not widen when trading. For example, if the broker’s fees are fixed and there is (for example) devastating news of a national disaster in the United States the forex spreads will not widen. It is important to note that typically fixed spreads are wider then variable spreads and the difference is that variable spreads have a tendency to be lower when market volatility is low.
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